Community Action loses grant funding

Monday

Jan 14, 2013 at 4:00 PM

Money had been used to proved education, job training and housing assistance

By Pressley BairdPressley.Baird@StarNewsOnline.com

Grant funding used by New Hanover County Community Action Inc. to help lower-income Wilmington-area residents has been suspended, according to the state Department of Health and Human Services. It's the latest in a litany of problems for the nonprofit management agency in downtown Wilmington, whose main duties included operating the federal Head Start early childhood education program and, using a federal Community Services Block Grant, a program designed to help New Hanover County residents get out of poverty. But funding for both programs has been suspended after repeated compliance issues with regulations.Community Action got about $350,000 each year to operate the block grant program which provides clients with education, job training and housing assistance, among other services.But in September, the agency got word from the state Department of Health and Human Services that it was in danger of losing that funding. Community Action wasn't meeting state regulations that required grant holders to have at least 15 members on a board of directors. In September, the agency had only 11 board members.Community Action's director, Cynthia Brown, said in late December that the agency now has the 15 members required by the state.But the state's letter by Jan. 3, Community Action hadn't sent the state any evidence that it had 15 board members, according to a letter from the state."Therefore, (the agency's) contract is suspended and no costs can be incurred after January 16, 2013," the letter says. Now, Community Action can request a hearing or give up the grant, according to the state. The agency must make a decision by Jan. 24. This latest announcement is not the first time the agency has had trouble with its federal compliance. In September, the agency lost an appeal to keep receiving $2 million in Head Start funding because it failed to correct problems that went back to 2009. And in October, during an annual risk assessment of agencies that receive Community Service Block Grant funding, the state found that Community Action is a "high risk" agency.The agency "has consistently demonstrated lack of capacity over the past two fiscal years to successfully administer" the grant, the letter from the state reads. Because of that, the state has also asked the U.S. Department of Health and Human Services to investigate the agency's handling of the Community Services Block Grant.Community Action board chairman Clarence Smith did not immediately respond to requests for comment.